A-LevelEconomicsInternational economic issues9708/12 · Feb/Mar 2018 · Q231 Mark

In 2014 Australia and China negotiated a trade agreement. This removed Chinese tariffs on 95% of Australian exports in exchange for greater access to the Australian economy for Chinese investors. How would the agreement be expected to affect the Australian balance of payments in the short run?

Acurrent account: greater inflow, financial account: greater inflow

Bcurrent account: greater inflow, financial account: greater outflow

Ccurrent account: greater outflow, financial account: greater inflow

Dcurrent account: greater outflow, financial account: greater outflow

✓ Correct answer

A: current account: greater inflow, financial account: greater inflow

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Feb/Mar 2018 Paper 1 Variant 2, question 23.

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